Shares in Litigation Capital Management Ltd (AIM:LIT) fell 14% in morning trading after the company lost a class action lawsuit it funded in Australia.
LCM had backed a case on behalf of Quintis shareholders, who alleged they were misled by the company’s former director and auditors, Ernst & Young.
While the court ruled that misleading and deceptive conduct had occurred, it found that LCM’s funded party failed to prove they suffered financial losses, meaning the case was unsuccessful.
LCM has invested A$13.2 million into the lawsuit and is now considering whether to appeal. The company has insurance to cover any potential legal costs.
The stock fell 10.92p to 66.88p.